PRESS MENTIONS

Work screeches to a halt on Kimco’s Harlem development

By
Adam Leitman Bailey

By: Jason Turcotttte

February 20th, 2008

Work has come to a screeching halt for Kimco Realty’s development on Harlem’s 125th Street. Up in arms over the displacement of 16 businesses, a neighborhood group has taken the matter to court, in an effort to stop demolition of the existing buildings there.

Kimco, the largest owner and operator of shopping complexes in the country, plans to redevelop the property into a four to six-story building offering both office space and retail. But to do so requires the demolition of 2331-2333, 2341, 2343, 2345, 2349 Frederick Douglass Boulevard, and 301 W. 125th Street.

And the Save Harlem Association, comprised of neighborhood business owners, say the project threatens the black heritage of 125th Street. Establishments including House of Seafood Corp., Body-Lawson Associates, Roti Plus, Manna’s Restaurant and Million Nail Salon will suffer displacement under existing plans.

“This building is Harlem’s last stand and its people are rallying around this case to save the civil and social center of the black world — Harlem USA,” said Adam Leitman Bailey, the attorney representing Save Harlem.

The American Planning Association, last year, named 125th Street one of the country’s 10 best streets. The neighborhood also marks the place where Malcolm X made historic speeches and author W.E.B. DuBois once worked. Some argue the rising Harlem rents are a sign of prosperity in New York; others see it as a threat to its culture.

But a source told Real Estate Weekly the gentrification argument is merely a “facade” and claims this particular matter has more to do with an extortion strategy than anything else.

According to Fred Winters, a Harlem resident and spokesperson for the project, Bailey is simply “playing hardball.”

Winters noted that the majority of tenants on the properties agreed to termination negotiations with Kimco, including Bobby’s Happy House — the area’s first black owned and operated store. “None of them really have the basis for fighting this; it’s leased space,” he added.

A joint venture with the Sigfeld Group, Kimco’s 35,000 s/f acquisition of the properties last year marked the highest-priced per square foot transaction in the 125th Street area. In addition to the properties slated for demolition, the $50 million deal included 112-118 W. 125th Street, 250 W. 125th Street, and 301-303 W. 125th Street.

Termination clauses in existing tenant leases spurred developers to move with redevelopment plans for the property. With the acquisition, New Hyde Park-based Kimco plans to develop a mix of office space and, according to Larry Rose, vice president of development, up to three floors of retail.

“I think the rest of Manhattan is so saturated with certain retailers, that this becomes one of the last frontiers that they haven’t been to,” Rose said.

Rose said Harlem is finally on the radar for developers, an offshoot of the last 15 years of real estate success Manhattan has seen. And projects like the W hotel suggest the Kimco development is just a drop in the bucket when it comes to activity on 125th Street.

Rose said plans aren’t etched in stone, due to the city’s pending approval of the area’s rezone. But he’s expecting a higher density use than what exists there now — a motley crew of eight run-down buildings. “While we have a nice size of property, I just see it as one piece of a bigger puzzle,” Rose said.

Kimco’s piece will, however, improve the retail options. Rose expects the site to garner interest from all types of tenants — including national retailers — from soft goods to electronics. But before they can proceed, Kimco will have to satisfy one NY Supreme Court judge or five disgruntled tenants.

A source told Real Estate Weekly that if Kimco prevails, the matter could be resolved in less than six months. But if the judge grants an injunction, the project could face up to an 18-month delay.

The law firm of Chadbourne & Parke LLP is representing Kimco. A show cause hearing is scheduled for Thursday, Feb. 21 at the State Supreme Court before Justice Emily Jane Goodman.